We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive all cookies on the Business Car website. However, if you would like to, you can change your cookies at any time

New car registrations: fleets lag behind private buyers

Date:
13 June 2018
|
Author: Sean Keywood

The UK new car market grew overall in May - but fleet and business sales were down. Sean Keywood reports.

The UK new car market saw a 3.4% year-on-year increase in registrations during May, according to the Society of Motor Manufacturers and Traders (SMMT).

However, this increase was driven by a 10.1% rise in private registrations. By contrast, fleet registrations fell by 0.7% and business registrations - classed as those made to fleets with fewer than 25 vehicles - down by 9.6%, although these make up a tiny fraction of the overall market.

This continues a trend seen in the overall figures for the first five months of the year, in which fleet registrations are down 7.1% compared with 2017. Business registrations are down 16.2%, while private registrations are down only 5.7%.

Barclays Corporate Banking head of retail and wholesale Ian Gilmartin said that, while May's overall increase in registrations was heartening, the fleet and business market was a worry.

He said, "Given the wider economic environment, double digit growth in private sales is pretty remarkable, even when 2017's weakness is taken into account.

"However, the struggling business and fleet sales remain a concern and are evidence of the challenges being faced by businesses when making significant spending decisions."

Elsewhere in the monthly figures for May, demand for diesel cars continued to plummet, with registrations down 23.6%, but this was offset by a 23.5% increase in demand for petrol cars and a 36.1% increase in registrations of alternatively fuelled vehicles, with the latter claiming their biggest-ever market share of 5.8%.

Included in this was a 72.7% increase for plug-in hybrids, a 22.6% rise for regular hybrids and an 18.7% rise for pure electric vehicles.

The SMMT cautioned that May's year-on-year growth, to 192,649 registrations, followed an 8.5% decline in the market last May, when demand was hit by changes to vehicle excise duty and uncertainty caused by the then-imminent general election, but said there was still cause for optimism.

SMMT chief executive Mike Hawes said, "May's growth, albeit on the back of large declines last year, is encouraging and suggests the market is now starting to return to a more natural running rate.

"To ensure long-term stability, we need to avoid any further disruption to the market, and this will require sustainable policies that give consumers and businesses the confidence to invest in the new cars that best suit their needs.

"Fleet renewal is the fastest way to improve air quality and reduce CO2, and this applies to hybrid and plug-in technologies as well as the latest low-emission petrol and diesels, which, for many drivers, remain the right choice economically and environmentally."

He said, "The increase in new car registrations in May shouldn't be taken out of context - May is traditionally stronger than April, but consumers and businesses are still hesitant when it comes to replacing their cars.

"Continued confusion around new emissions testing (WLTP) and the impact on availability of vehicles, specifically plug-in hybrids, combined with the lack of guidance on policy beyond 2021, means many consumers and businesses are holding off replacing their cars."

Barnett said that clarity was needed from the UK Government to help people make informed purchasing decisions that would contribute positively to targets around emissions and take older, more polluting vehicles off the road.

He added, "This month's figures buck what has largely been a downward trend, but it's important to remember that we are also seeing the effects of a natural levelling off in demand following a sustained period of record growth.

"When the figures are viewed in line with most fleets' replacement cycles, the picture is more encouraging."

Share

Subscribe

For the latest news, tests and analysis, sign up to the BusinessCar daily email: